[Red Envelope] Is it the Breakthrough Dragon?

Foreword [Taogu Ba]

A restless mind arises from external disturbances, While external disturbances originate from internal attachments. The visible ups and downs of the market Are often influenced by unseen states of mind.

Therefore, It is essential to understand How to guard the inner peace — Calmness and confidence. In this restless market, We are often led by K-line emotions, While neglecting the invisible strength within.

Market fluctuations are tangible— Rising and falling in waves, But the intangible— Mindset and discipline, Are like ballast stones.

Only by stabilizing them Can the path of investment — Be steady and far-reaching.

1. Market Review:

Main actions on Tuesday:

1. During the bidding, sold half of GCL-Poly at a 7% premium, and exited the other half when it couldn’t recover to the intraday yellow moving average after a 4% rebound. Reason for exit: The current environment is chaotic with rotation, not a main upward trend. Mainly arbitrage. Selling half at a premium captures gains, but when funds can’t support the stock to return to the yellow average, that’s the final exit point.

2. Based on the trend of Hengdian Film & TV, added to Light Media in the morning. Light Media is also driven by arbitrage expectations. Hengdian’s strong block with regulatory resistance suggests speculative funds will shift toward more elastic stocks. Plus, Light Media has invested in “Flying Past Life 3,” adding to its rebound arbitrage potential.

3. Bought about 1% lower in Hangxiao Steel Structure, affected by the sharp decline of the aerospace sector in the morning. In the afternoon, a wave of funds pushed it higher, betting on positive news catalysts tonight. Usually, this provides a premium for a high point exit.

4. Market Breakdown:

(1) Index understanding: With only three trading days before the Spring Festival, the market will likely return to low volume. Today’s market still shows characteristics of quantitative rotation and stretching, with no sustained themes or strong individual stocks, mainly arbitrage. Today’s challenge was successfully met by Hengdian’s breakout. If tomorrow, during the key regulatory day, it still performs strongly, this chaotic rotation cycle will be broken by it. The short-term environment is expected to gradually improve.

(2) Continuous board tiers:

Hanjian broke above 5 consecutive boards yesterday. This morning, it did not give a premium, indicating that the current height of continuous boards is still limited to 5. Hengdian’s re-break to the second board, after its first break, was at the 4-to-5 transition point, suggesting this node’s effect will be guided by Hengdian’s trend. Traders focusing on high-standard continuous boards currently face an environment that doesn’t support this pattern. Only after the space for continuous boards truly opens up can the corresponding pattern be executed.

Yesterday’s article also emphasized that the height of continuous boards might not break through this week but could continue the style of breaking and re-breaking. Today’s trend of Hanjian and Hengdian confirms this view. Whether Hengdian can become a breakthrough dragon depends on tomorrow’s performance. If it withstands the first day of regulatory scrutiny and hits a new high, a new short-term cycle will begin.

3. Sector Analysis:

(1) Leading sectors:

• Media (Film/Short dramas)

• Limit-up stocks: Wanda Cinema, Dukang Culture, Jiecheng Shares, Rongxin Culture, Hengdian Film & TV, Shanghai Film, Bona Film, China Film, Light Media, etc.

• Catalysts: ByteDance Seedance 2.0 explodes, AI video generation tech breakthroughs reduce content creation costs, media industry commercialization accelerates, and film ETF hits a record high.

• Humanoid Robots

• Limit-up stocks: Wanxiang Qianchao; others following: Lixing Shares, Siling Zhiku, Wuzhou New Spring, Tianqi Shares, Zhongda Lude.

• Catalysts: Beijing Humanoid Robot Innovation Center releases Embodied Tiangong 3.0, achieving tactile interactive full-body high-dynamic motion control; RynnBrain enhances intelligence; industry tech iteration accelerates.

• PCB Concept

• Leading stocks: Nanya New Materials, Honghe Technology (both hit record highs); Zhongfu Circuit, Zhaochi Shares follow.

• Catalysts: AI computing power and consumer electronics demand support high-end HDI, high-frequency high-speed materials; humanoid robot development drives PCB demand; funds shift toward stable tech sectors.

(2) Declining sectors:

• Commercial Aerospace

• Leading stock: Shunhao Shares hits the limit-down.

• Decline logic: Previously surged significantly, profit-taking occurs, hot sector rotation leads to capital outflow, sector rationalizes.

• Consumer Goods

• Leading stock: Hangzhou Jiebai hits the limit-down.

• Decline logic: Market volume shrinks, funds favor AI and tech themes, pre-holiday lack of catalysts, sentiment weak.

4. Tomorrow’s Opportunities:

(1) First board to second board: Zhongshi Media; (2) Continuous board tracking: Shanghai Film + Bona Film; (3) Rebound pattern: Runtu Shares.

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That’s all for today’s review. Tomorrow morning’s pre-market analysis will be posted around 8:50 AM in the comments. Feel free to verify before and after the market opens!